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Legal Technology: The Impact on Law Practice Management

Technology has forever changed things, and legal technology in particular has had a profound effect on the practice of law. How does it influence your practice?

Written by Embroker Team Published May 15, 2023

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Technology has forever changed things, and legal technology in particular has had a profound effect on the practice of law. From the way we communicate and interact with one another to how we share files and shop for supplies, technology has profoundly impacted organizations around the world. 

In place of law books, there are now online databases; digital contracts have replaced paper copies; managing clients from your smartphone is the norm. Legal technology has redefined law, bringing efficiencies and simplification to everyday tasks.

But if you think your law firm doesn’t need to jump on the legal technology bandwagon right away, you may want to think again. As the American Bar Association (ABA) notes in its July 2021 Big Ideas Issue:

“To the extent that you have not fully adopted legal technology, get that done.”

 Change can be intimidating when the status quo is so comfortable. However, when it comes to tech and innovation, embracing change brings ample opportunity for law firms to improve and grow their operations. Law firms that utilize legal technology solutions will undoubtedly outshine and outlast the competition.

 Still on the fence about investing in technology? Here’s a look at some of the advantages legal technology can bring to your law firm. 

AI Optimizes Workflow, Increases Efficiencies

There’s an age-old fear that technology will replace humans. But scholars have been addressing the automation of legal processes since at least the 1960s.

Tools like artificial intelligence (AI) won’t replace lawyers; instead, the legal technology will complement and improve lawyers’ day-to-day work. However, lawyers who use AI will replace those who don’t use it.

McKinsey Global Institute estimates that existing legal technology could automate 23% of lawyers’ workloads. Fortunately, AI is transforming the legal field and improving efficiencies by conducting time-consuming research, document review, and case analysis. With AI, a contract can be reviewed in less than an hour, saving 20-90% of the time required to do the same work manually, but without the risk of human error.

 In the not-so-distant future, AI may even become a preferred means of interviewing since people are more likely to be honest with a machine than with a person because computers don’t pass judgment.

Need more proof of AI advantages? A few years back, JPMorgan Chase implemented an in-house AI program known as COIN. In just a few seconds, the program completed what previously took lawyers and loan officers 360,000 hours each year.

JPMorgan might be the biggest bank in the U.S. with loads of resources, but the sentiment behind introducing the program can resonate with any law firm around the country. “People always talk about this stuff as displacement,” explained Dana Deasy, who was JPMorgan’s chief information officer when COIN was introduced. “I talk about it as freeing people to work on higher-value things.”

AI has the potential to become the most significant technology disruptor the legal field has seen–and the firms that adopt it are sure to stand out in the crowd.

Using Legal Technology to Attract and Retain Talent

Remember the good old days when you could post a job opening on your site or with a recruiter and have a long list of highly qualified individuals in no time?

Finding talented individuals and keeping them on board has become an obstacle for many employers around the country.

The issue is partly due to the massive 10.4 million job openings reported in September 2021 by the US Bureau of Labor Statistics. The challenge of finding talent to fill those positions has been exacerbated by what experts say is a widening skills gap, with 80% of employers in the U.S. struggling to fill positions due to skills gaps compared to a year ago, according to a report by Monster.  

Another contributing factor is what has been called ‘The Great Resignation.’ In September 2021 alone, a record 4.4 million Americans quit their jobs.

Many law firms have increased associate salaries and bonuses as a way to fill positions in the hyper-competitive market. Still, even that hasn’t slowed attorney turnover, which is said to be approaching a “boiling point.” That’s why law firms need to look beyond compensation and explore new ways to recruit and retain talent.

One key offering that can help your firm stand out and grab the attention of talented individuals is investing in legal technology. Tech-savvy legal professionals now expect firms to provide tools that will enable them to work more efficiently. On top of that, using legal technology solutions often contributes to more interesting and fulfilling work.

What’s more, legal technology that boosts productivity and collaboration outside of the office also comes with the added benefit of being able to tap into a wider talent pool.

Once you’ve attracted talent to your firm, tech solutions can encourage them to stay. Take for example burnout, which unfortunately is a prevalent issue in the legal industry. A contributing factor to lawyer burnout is too much time spent on administrative tasks; attorneys reportedly spend nearly 40% of their day on tasks other than practicing law. However, advancements in legal technology with automation and AI can play a significant role in lessening the workload of lawyers’ administrative work and, hopefully, alleviating some stress to create a more positive working environment.

Simply put, your firm needs qualified talent, and those individuals want to use the latest legal tech available.

Managing Client Expectations with Legal Technology

In the last decade, client expectations have changed drastically alongside advancements in technology. Increasingly, clients expect their attorney to deliver a higher level of service, faster, and at a competitive rate.

Fortunately, leveraging legal technology means that firms can provide a personalized and positive experience for clients.

Using new technologies, like research software equipped with AI and automated document drafting, means you will be able to readily inform your clients about their cases and set realistic goals and objectives.

It’s also no secret that tech solutions can automate many repetitive tasks. Meaning clients likely won’t be pleased about the prospect of paying for long hours spent on administrative work like document or contract review. While these tasks are still necessary for any case, AI and other technologies can easily streamline finding errors or missing clauses in documents.

Remember how 40% of a lawyer’s day is spent on tasks outside of practicing law? Getting some of that time back and putting it towards tasks that strengthen client relationships would be well worth the investment in new legal technology solutions.

Clients come to you for your expertise. In order for your clients to see you as a reliable and effective expert fon legal matters, it’s time to put away the fax machine and the shuffling of papers and invest in new technologies.

Embrace Legal Technology, Avoid Legal Malpractice

We saved the best for last. One of the most pressing arguments for adopting legal technology is that 39 states have included a duty of technology competence in their respective Rules of Professional Conduct. And failing to have a decent level of technology competence, even inadvertently, could unleash legal malpractice claims.

 Most of these states have used language similar to Comment 8 of the ABA’s Model Rule 1.1, adopted in 2012, stating that “a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.” That means that in those 39 states, claiming ignorance of any legal technology as a reason for not implementing it, or implementing it incorrectly, is not a valid defense for lawyers against a potential ethics violation or technology-related malpractice suit

 North Carolina and Florida have even taken things a step further and made it a requirement for lawyers to take continuing legal education (CLE) courses specifically on legal technology. “We are long past the time when it can be reasonably argued that a lawyer can provide efficient representation to their clients without utilizing technology tools,” according to the ABA’s TechReport 2020.

 All of this isn’t to say that lawyers have to become tech wizards overnight, but you are held to a “reasonable efforts” standard where legal technology is concerned. It comes down to having a general awareness of legal technology, the associated risks (think cybersecurity), and perhaps most importantly, a willingness to learn.

 Some experts think the day will soon come when not using AI may be considered legal malpractice. On the other hand, rushing to introduce tech tools without the proper training can also lead to legal hot water. When reviewing your firm’s legal technology goals, make sure you also have a legal professional liability insurance policy in place that’s tailored to meet the needs of your law firm. And if you don’t have legal malpractice insurance or you’ve let a policy lapse, it’s best to get that remedied ASAP.

Remaining Relevant with Legal Technology

For any law firm, the ultimate benefit that technology offers boils down to remaining relevant, well above the law, and saving money.

Firms that think they can stick with the status quo and not embrace emerging legal tech tools will soon find themselves left behind and irrelevant to potential clients and talent alike. After all, just because a practice isn’t “broken” doesn’t mean it’s the best way forward.

 While legal technology won’t replace everything, it is the new norm in the legal field, bringing with it increased efficiency and productivity, improved workflows, and the ability to serve clients better.

 Plus, if the pandemic has taught us anything, it’s the need to be willing to adapt. Lawyers who are proactive in embracing legal technology will be able to turn future market implications into opportunities. There’s no question that technology will continue to change the legal landscape. Though we may not know exactly what the next decade will bring, there is one thing that we do know for certain: legal technology is here to stay.

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